There is still a common belief among Ontario employees that holding onto a job forever is their right, and any time that an employer ends their employment they are automatically in the wrong. “They can’t fire me!” “They can’t do that!” “They need to give me a reason.”
These employees are half right.
Yes, if an employment contract does not have a fixed end date, then that job can theoretically run forever, or at least for the employee’s lifetime. However, either side still has the power to end that contract – employees can resign, and employers have the power to end their employment relationships.
They just need to do it properly.
There are two primary ways to do this in Ontario, and they are known as ‘with cause’ and ‘without cause.’ We’ll explore the difference between the two, look at why so few employers truly have ‘cause,’ and why firing an employee for cause can become a very expensive lesson.
Two types of terminations
The most common mistaken belief amongst employees is that they need to have their employment terminated for a reason. This is not true – employers can let employees go for practically any reason, so long as it is not discriminatory or contrary to the Human Rights Code. Simply put, you cannot fire an employee for the colour of their skin, but you could potentially fire them for the colour of their shirt.
Without cause terminations are the most common types of employment terminations in Ontario and they mean exactly that – employers do not need a reason to let their employees go. In fact, employers are often advised not to give a reason while issuing termination letters, as it can make things uncomfortable and contentious if the employee disagrees.
Instead, in a without-cause termination an employer is required to either give the employee reasonable notice of their termination, or pay them in lieu of that notice if they are being let go on that same day. This can take the shape of working notice, a monetary payment, or a combination thereof. The length of this notice is determined by a combination of the employment contract as well as the common law.
Except most employers believe that having a reason in their minds to terminate someone’s employment automatically amounts to ‘cause.’ It does not. Letting someone go because they are not performing up to expectations, have a sour attitude, or are clashing with a manager may be reasons to end someone’s employment, but they do not rise to the legal definition of ‘cause.’
So, what does actual ‘cause’ look like?
What is ‘just cause,’ exactly?
In legal terms, cause, commonly known as just cause, is an act by an employee that is so severe and deliberate that the working relationship simply cannot continue. Cause usually includes serious incidents of misconduct, including harassment, theft, violence, insubordination, or other major misdeeds.
There is potential for smaller wrongdoings to rise to the level of cause if they continue to occur. In any discipline policy, employers can outline that initial infractions may be dealt with a warning, but repeatedly breaking a workplace policy despite all warnings may lead to serious punishment up to, and including, termination for cause.
While cause usually entails one major incident, often known as a culminating incident, the reality is that there is no single hard and fast rule that determines whether a situation meets the level of just cause. Context is everything in analyzing whether or not an employer had cause. What an employee does, and how they handle it subsequently, can make all the difference.
For example, an employee who has a heated outburst and begins yelling at a colleague is certainly in the wrong. Yet if it is their first and only incident of misbehaviour, if they recognize it and apologize quickly, and seek to make amends, it is unlikely to reach the threshold of just cause.
Alternatively, if an employee is caught stealing from the company, and then lies about it during a subsequent workplace investigation and attempts to cover their tracks, that would most likely reach the cause threshold. In their dishonesty, the employee is showing that the trust relationship inherent within their employment is likely broken beyond repair.
Why is ‘just cause’ so risky?
When an employee is let go for cause, that often means that they’re denied any payment upon termination – no termination pay, no severance pay, no notice – nothing. This is incorrect in most cause cases. The law states that unless an employee has committed wilful misconduct, disobedience, or a wilful neglect of duty, they are at least entitled to their termination and severance pay under the Employment Standards Act, 2000.
However, employers far too often allege that they have terminated an employee for cause without having a solid case behind them. They have dismissed an employee empty-handed, with poor prospects of re-employment, for reasons that do not meet the high legal threshold for just cause. Their reasons may be valid, but they simply do not rise to that level of cause.
In these cases, employees who claim for wrongful dismissal may simultaneously claim the employer acted in bad faith in how they were dismissed. If a court agrees, these employees may not only be awarded wrongful termination pay, but additional sums of money for the employer’s bad behaviour. In short, alleging just cause when it isn’t truly there can be a costly lesson.
Final thoughts
For employers, it is rarely advisable, save for the most extreme circumstances, to terminate an employee for cause. The risk of losing that fight is not only high, but it can be costly as well. Yes, it may be odious to pay out a bad employee, but it is even more painful to spend significant time and expense on a legal battle that ends in a loss.
Instead, the wiser path is to monitor employees’ performance carefully and routinely. This will allow you to address problems as they arise, and if they cannot be rectified quickly, you can let an employee go without cause before they amass a lengthy tenure. This is not only a cost savings, but it helps keep problematic employees out of your organization. If you are thinking of terminating an employee, we can advise you on the right steps to take and an appropriate termination package.
For employees, if you have been terminated for cause, we can help assess your case, and determine if the employer took all the right steps. If they did not, and that is frequently the case, then you do not have to take your just cause termination lying down.
Contact our office today to set up a consultation.
